TSLA - Tesla Motors, Inc. - Teslive 2013 Transcript

Presentation

Analyst

So, I would insinuate a really nice intro for Elon and I realize everybody here knows far more probably than I do and you don't want hear me talk. So, Elon?

Elon Musk

Co-Founder, Chief Executive Officer, and Product Architect

As you guys probably know that the President didn't organize this, this is sort of a spontaneous thing from sort of Tesla owners. So we're trying to figure out what are the things we should be doing differently or better or focusing on and just kind of -- kind of back and forth sort of conversation.

And I will say that the goal of Tesla is really to accelerate the advents of sustainable transport. So there are plenty of car companies in the world, there's not really a need for a new car company or another gasoline car company or anything like that. But there is a need for a company that's pushing for sustainable transport, something that as we extrapolate into the future, we can see a sort of positive bright future and I actually didn't think that will be necessary to do something like Tesla because at one point when there was the EV1 and the original electric RAV4 that things were kind of headed in the right direction and I thought for sure -- like the EV2 and EV3 and everything will be fine, and then of course that's not what happened.

As soon as California changed its regulations, GM recalled the EV1 and crushed them -- in a junk yard and then people actually held the candle lit vigil to -- as it was someone who was -- it was sort of a capital punishment type of thing. And it's just amazing, because I mean it's really quite rare for people to hold the candle lit vigil about a product, really unusual. So, we see that sort of the forcing function needed to come from a new company and so we created Tesla starting off with the Tesla Roadster.

And in the beginning, people said well, you're not going to be able to make a car that looks good and goes fast and has a long range and we did and then they said well, nobody is going to buy it. So, then thank you for buying by the way. In fact, I am really deeply appreciative of everyone that bought a Tesla, because without people like you, Tesla won't be around, and it needs people that are forward-thinking that are willing to take a chance on new product and new company and that's critical to making it work.

So, we did the Roadster and we got a lot of flak from people that thought well that's the reason me and JB and everyone else, the reason that we created the company they thought it was because we felt that there was a shortage of sports cars for rich people. And so that's why I wrote that blog several years ago just to explain like that wasn't actually the reason that we created the company.

But in order, whatever you have got something that's the first version of the technology and it's in low production volume, whatever you do it's going to be expensive, and people are only prepared to pay sort of a lot for something like a sports car and then now with Model S , we are coming to step two of the plan, which is kind of a medium price, medium volume car and then the step three, we want to get to as soon as possible, which is sort of a low priced high volume car and that's where we're headed. But obviously, vital to all of that is our customers that are willing to buy the cars like the Model S and support company along the way.

So, we want to make sure that we're sort of doing the smart things to get there and just looking for feedback and ideas and I'm also happy to answer any questions, bear in mind the obvious constraint that as a public company anything, I would say will be pounced upon by the media. Let's just start dive right into kind of the conversation and the questions. Should we start there?

Q & A

Cole Wilcox

Longboard Asset Management

Hi Elon. Cole Wilcox from Longboard Asset Management.

What are guys going to do in terms of an official economic incentive for your single greatest customers and say kind of fuel the feedback loop as you go forward in time to expand all over the world?

Elon Musk

Co-Founder, Chief Executive Officer, and Product Architect

From my PayPal days, we spend a lot of time thinking about how to create a viable growth engine, which was -- I mean the keys to that are of course making, reducing the friction of buying and reducing the friction of referral, so making it really easy to buy and refer and then creating an incentive. And I think one of the keys is to create an incentive both for the person doing the referral as well as the buyer. In that way, if by referring someone -- both parties actually benefit, then it works well. Our issues right now are actually not so much demand generation as they are production related.